MCG QUANTITY SURVEYORS BLOG
The cost of a Natural Disaster
In 2000, the Construction Data division of Reed Business Information Systems (Reed) surveyed 1000 randomly selected homeowners. They concluded that:
- 87% of homes were under-insured by any amount
- The average level of under-insurance was 34%
In 2002, the Insurance Council of Australia conducted a survey of seven companies sharing 80% of the home building insurance market. The survey suggested that:
- 5% of homes were under-insured by 10% or more, and
- 5% of home buildings were under-insured by 30% or more
In 2003, the Royal Automobile Club of Victoria (RACV) found that consumers do not increase the sum insured following improvements to their homes. The survey found:
- 24% of consumers did not increase the level of cover after renovations costing between $20,000 and $40,000.
In 2003, bush fires caused death, injury and destruction of property in the ACT. A total of 488 homes in and around Canberra were destroyed.
However, many insured homeowners found that their building insurance policies did not meet the full cost of rebuilding their home and associated expenses. They found, they were underinsured.
The Insurance Disaster Response Organisation reported that structures destroyed in the ACT bushfires were underinsured, on average, by 40% of the replacement cost.
Respondents to ASIC’s ACT bushfire survey were asked how the sum insured under their home building policy was initially calculated. The results found:
- 51% estimated the sum insured themselves
- 23% reported using information from an insurer to help them
- 80% saying they believed they were adequately insured
On the 11th January 2011, the then premier of Queensland, Anna Bligh, declared three quarters of Queensland a disaster zone as the State was affected by one of the most severe flooding events in its history.
About 15,000 properties were affected by significant flooding, with 5,000 businesses affected. In Ipswich a further 3,000 homes and businesses have been flooded. The Local Government Association of Queensland estimates that 70,000 to 90,000 km of council roads have been damaged (councils are responsible for 80% of roads).
IBIS World also expects approximately $1 billion to $2 billion in additional spending on commercial and institutional premises would be needed in the following 2 years of the event. The damage to these buildings was partly contained by greater use of concrete and steel, as distinct from the timber and plasterboard of most residential housing.
However the Reconstruction cost was estimated at some $10 billion. (Jan 2011 IBIS World)
It was recorded that high intensity rainfall between the 12th –14th January 2011 caused major flooding across much of the western and central parts of Victoria.
This, along with follow-up heavy rainfall from events such as Tropical Low Yasi, caused repeated flash flooding in affected areas in early February in many of the communities affected by January’s floods.
As at the 18th January, more than:
- 51 communities had been affected by the floods
- Over 1,730 properties had been flooded
- Over 17,000 homes lost their electricity supply.
- 51,700 hectares of pasture and 41,200 hectares of field crops flooded
- 6,106 sheep were estimated to have been killed
The Department of Primary Industries later calculated a damage bill of up to $2 billion.
New South Wales Bushfires
The New South Wales Rural Fire Service notes that the 2012-2013 Christmas period witnessed large parts of NSW affected by bush fires brought on by searing temperatures and wild winds.
The RFS has confirmed 33 properties and more than 50 sheds have been destroyed, as well as machinery and there have been extensive stock losses in the bush fire west of Coonabarabran, which also damaged the Siding Spring Observatory. The fire in the Warrumbungle National Park in the north-west of the state had burnt out nearly 40,000 hectares and has a 100-kilometre-wide front.
More than 170 fires continued to burn across the state at that time
In Tasmania, a Victorian fire fighter had died while fighting bush fires that have destroyed about 170 properties.
Recent Disasters Table
|Recent Natural Disaster||Total Cost|
|QLD Cyclone YASI||$ 1,412,239,000.00|
|QLD Flooding||$ 2,387,624,000.00|
|SW QLD Border Flooding||$ 131,432,000.00|
|NSW & VIC Flooding||$ 131,890,000.00|
|VIC Flooding||$ 126,495,000.00|
|VIC Christmas Day Storms||$ 728,640,000.00|
|VIC Severe Storms||$ 487,615,000.00|
|WA Perth Bushfires||$ 35,128,000.00|
|WA Margaret River Bushfires||$ 53,450,000.00|
|Tasmanian Bushfires||$ 86,700,000.00|
|NSW bushfires (Coonabarabran region)||$ 12,000,000.00|